Chapter 250
Chapter 250
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Translator: crow
Chapter Title: Chapter 250 - 환율 전쟁
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Translator: crow
Chapter 250: Currency War
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After Korea's shopping spree for American assets, Americans realized that Korea had become a formidable competitor.
"Now Korea isn't the old Korea we knew. It's turned into a real monster of a country!"
Unlike Germany or the Soviet Union, which had challenged America's hegemony through military might, Korea was the first rival to rise economically and pose a threat.
As Korea's presence grew among Americans, voices calling for checks on Korea began to emerge within the Republican Party.
"Koreans have grown too big, so we need to shift our priorities. It's time to check Korea before the commies."
Of course, the Republican mainstream scoffed at such claims.
"That's the kind of naive talk Kennedy would spout. If we check Korea and Pyongyang cozies up to Moscow, have you even calculated how the board would change?"
There had been a brief period of disarmament at the tail end of Khrushchev's era, but the Soviet Union still had nearly 100,000 tanks eyeing Europe.
In a situation where such terrifying commies were holding firm, turning an economically rising Korea into an enemy?
It wasn't the talk of sane people.
The Republicans firmly dismissed the Korea-check rhetoric.
Even so, voices advocating for checking Korea didn't disappear within the party.
A prime example was the "Special Studies Project" announced by Henry Kissinger, advisor to Governor Nelson Rockefeller.
The Special Studies Project was an ambitious study defining the crises and opportunities America would face, and clarifying national objectives and goals.
Through this study, Kissinger prophesied that Korea would become America's greatest future rival and argued for swift reconciliation with the Soviet Union to bring them down.
"There's no law saying the commies have to confront us forever. If it serves the national interest, realpolitik means shaking hands with the devil himself, not just commies. How long do you plan to live in a fantasy world obsessing over commies?"
"You're saying that makes sense? That we could even join hands with commies to check Korea?"
"Open your eyes and look clearly. What's threatening us—the Soviet tanks or Korean products?"
"Don't you know Korea's economy is still only half of ours? Plus, with their population just a third of ours, they can never surpass our economic scale."
"You'd do well to remember first that their lack of population and size will be filled by the EA."
The internal Republican debate was evidence that America was beginning to break free from Cold War thinking.
It was a change brought by Korea's rapid rise.
In truth, the shift in perception among American politicians was a bit slow.
"Slow. If they were going to check us, they should've attacked instead of wasting time talking."
America's financial sector, which worshipped profit like a religion, had been attacking the won since the time of the non-convertibility declaration.
Korea's economic authorities knew of these attacks but had tolerated them for dollar supply reasons.
However, the attacks had gone way too far.
"Foreigners are still buying up won nonstop?"
Wall Street had flooded into Korea's foreign exchange market and hoarded massive amounts of won.
"It's not a small scale either. They scooped up nearly 500 million by year-end."
"It's aiming for exchange gains."
"Monitoring confirms that."
"We should intervene fully in the forex market before things get worse."
If speculators were messing with the exchange rate, they had to step in, even if it meant taking heat for neighborly impoverishment or whatever.
After discussions, the economic bureaucrats offered this opinion.
"First, deploy 1 billion and watch the trend."
"That's a bit short."
"Pardon?"
Lee Sung-jun responded to the economic bureaucrats' advice with a bombshell declaration.
"Drop 15 billion."
15 billion won at the current rate equaled about 20 billion USD.
20 billion dollars—enough to buy a decent-sized country outright.
The bureaucrats stared at the prime minister, dumbfounded.
"Did you say 15 billion just now?"
"That's what I said."
"But, sir. If we drop that much volume, the West won't sit idly by."
"I'm not a fan of half-hearted interventions that just fatten up the speculators. When speculators crawl into our forex market, we burn off their fingers."
Lee Sung-jun's resolve was firm.
Western interference be damned—they'd crush the speculators first.
This matched the strategies of the Bank of China and Japanese banks against currency speculation.
If they came at you with a spoon, you hit back with a mortar.
That was how you stopped the follow-up hordes.
"We'll carry it out."
Ahead of the intervention, Korea's economic authorities signaled their intent to enter the currency market.
"We warn you. Hoard won in the forex market, and you'll see blood."
Even with Pyongyang's threat, the speculators didn't bat an eye.
"No big deal. Buying won is a sure profit anyway."
The financial capitalists believed betting on the won would yield gains.
They'd profited that way until now.
But Korea's economic authorities weren't as soft as they thought.
"Drop 1 billion."
Within a day of opening, Korea dumped 1 billion won.
The merciless cascade of currency drew a downward curve on the exchange rate.
As the rate plummeted, speculators panicked.
"Is this for real? Dumping won like this?"
Everyone grew scared of the massive won onslaught.
"Going head-to-head with Pyongyang offers no chance of victory."
"It's not a size we can handle at our weight class."
If it had been some emerging market, they might've fought to the end, but the opponent was the world's top net asset holder.
Some quickly packed up and fled Korea's forex market.
Meanwhile, battle-hardened forex veterans judged that Korea dumping won now was the perfect chance to profit.
"With the world's eyes on them, the Koreans won't keep pouring out won forever. Let's gorge on it while we can."
They took positions to keep buying won.
The won stopped falling and held steady.
The next day, Korea dumped another 1 billion.
"This much we can handle."
Speculators gulped down the won stubbornly, standing off against Korea's economic authorities.
The won seesawed up and down.
Then Wall Street's big banks caught the scent.
"Things are shaking up in the Korean forex market?"
"If we win, the won will skyrocket, so let's have some fun."
As they charged in with dollars, the exchange rate rocked violently again.
"Up it to 2 billion. See if they hold."
"What? 2 billion?"
The battlefield where Korea clashed with Wall Street's hyenas was fierce.
As the won-dollar rate danced, exchange-rate speculators lined up at banks for profits.
"just hold out and we win."
Wall Street's hyenas swelled their bellies, trusting their pack's size.
But Wall Street's hyenas and speculators overlooked one fact.
"Spin the printing presses harder."
The won could be printed as long as there were presses.
Once the initial 15 billion was exhausted, Korea prepared another 10 billion.
Pyongyang didn't hide this fact.
"We won't allow currency speculators a single penny of profit."
The financial capitalists were shocked by the Korean economic authorities' declaration.
"What? You think the international community will let you flood that much money?"
Korea's economic authorities were resolute.
"Die or get out. Pick one."
If Korea followed through with the extra 10 billion as promised, the game was over.
"Isn't this state-level market intervention? The government needs to step in."
Wall Street tried pressuring through the US Treasury, but Korea didn't flinch.
"It's justified action to burn the speculators' fingers."
True to their word, Korea dumped 10 billion, smashing the exchange rate in one blow.
"Huh?"
"It's over."
The speculators didn't even have time to scream.
In days, 30% of their won assets turned to dust.
The Korean government declared they'd dump more won if the currency value rose beyond the current rate.
"We're prepared. Anyone else want their remaining fingers scorched, step up."
That one line made Wall Street banks and speculators alike shake off their hands.
"Crazy bastards."
"Those guys are for real. They'll do it if they say they will."
Unlike most countries, Korea openly intervened in the forex market and stood firm.
Of course, Korea emerged unscathed? Not quite.
Right away, the won's myth as a safe asset shook badly.
On top of that, artificial currency value manipulation drew flak from all nations.
"You're openly devaluing your currency? Are you insane?"
"No, we trusted Pyongyang, so what are we supposed to do if you smash the won like this? Huh?"
For Korea, which had aimed to elevate the won's status, it was a painful loss, but better than letting export firms die.
"If we're breaking bones anyway, we have to accept some losses."
The massive currency war in early 1964 made Koreans realize that even this country had 'enemies.'
Those enemies were represented by Wall Street—the nation called America.